Graham Bishop.com

ECOFIN on bank recovery and resolution
The Council discussed a proposal for a Directive establishing a framework for the recovery and resolution of credit institutions and investment firms, focusing in particular on the design of the bail-in instrument. View Article

Dow Jones: Finance ministers split over bailing in depositors
At a meeting in Brussels, ministers from the EU's 27 Member States expressed widely divergent views over how to treat uninsured depositors - those with more than €100,000 euros in the bank. View Article

FT: Germany backs depositor preference in bank bail-in plans
Europe moved closer to favouring big uninsured depositors over bondholders when imposing losses on a failing bank's creditors, despite UK-led warnings that the special treatment would have a "perverse effect" on bank funding. View Article

Bloomberg: EU sees shocks without bank depositor preference rule
European Union deposit insurance funds would be vulnerable to "huge shocks" unless depositors receive preferred treatment over other unsecured creditors, a study on proposed rules for handling failing banks showed. View Article

VP Rehn: Press speaking points at Eurogroup press conference - Urgent to move forward with banking union
Rehn said that establishing a banking union would be one of the most crucial tasks at European level over the coming months and years for creating the foundations for growth and jobs. View Article

Wolfgang Schäuble: Banking union must be built on firm foundations
In an op-ed article for the FT, the German Federal Minister of Finance explains why the European banking union projects needs more than cross-border supervision. View Article

Reuters: Spain, Portugal push for full banking union as Germany finds hurdles
Spain and Portugal called for the eurozone to complete a banking union, while Germany underscored legal hurdles before a central element of the plan to deal with failing banks can be introduced. View Article

Bloomberg editorial: Germany is wrong to delay a real banking union for Europe
In the next few weeks, the Commission is due to announce plans for a single bank resolution authority for the euro area. Germany's finance minister has long expressed doubts about this step, saying it would require changes to European treaties, and has opposed the pooling of taxpayer liabilities. View Article

CEPS/Mayer: A Copernican turn for banking union
Instead of trying to move from common bank supervision over to resolution and then on to deposit insurance, Mayer argues that policy-makers should go backwards and start with deposit insurance, move from there to resolution, and end with supervision. View Article

Dirk Schoenmaker: An integrated financial framework for the Banking Union - Don't forget macro-prudential supervision
This essay reviews the sequencing of the functions of supervision, resolution, deposit insurance and the fiscal backstop in the Banking Union, and puts forward a concrete proposal for conducting macro-prudential policy in the prospective Banking Union. View Article

ECOFIN Council conclusions on SEPA
The Council reiterated its support for the aim of the Single Euro Payments Area, and stressed that immediate efforts were required by all market participants to complete the SEPA migration in euro area Member States by 1 February, 2014. View Article

ECB: Monthly bulletin - May 2013
The ECB published its May bulletin, providing a detailed analysis of the current economic situation and risks to price stability. View Article

IMF Discussion Note: Creating a safer financial system - Will the Volcker, Vickers, and Liikanen structural measures help?
The US, the UK and more recently the EU have proposed policy measures directly targeting complexity and business structures of banks. Unlike other, price-based reforms, these proposals have been developed unilaterally with material differences in scope, design and implementation schedules. View Article

iMF Direct: Banking on reform: Can Volcker, Vickers and Liikanen resolve the too-important-to-fail conundrum?
In addition to the G20-led global regulatory reforms such as Basel III, the US and the UK have decided to impose limits directly on the scope of banks' businesses. The EU is contemplating a similar move. View Article

EACB: New research highlights co-operative banks' resilience and merits, but greater recognition needed
EACB organised a dialogue with academics and stakeholders at the EP in Brussels. Top researchers from renowned institutes and universities of various European countries presented new evidence on the sector. View Article

Bloomberg: Wheatley seeks dual-track Libor as Gensler says replace rate
Martin Wheatley said the Libor should eventually be replaced with a transaction-based benchmark using a dual-track system. The tarnished benchmark, based on a daily survey of panel banks, should run in parallel with a transaction-based rate until a full overhaul of the system can be enacted. View Article

Bundesbank/Weidmann: Germany shows - Reforms pay off
"Short-lived pump-priming and spending programmes and ever-larger debts for subsequent generations will not create sustainable employment", said Bundesbank President Jens Weidmann in an interview with the Westdeutsche Allgemeine Zeitung. View Article

Bundesbank: Banking across borders
Banking across borders has risen over the past two decades, yet there is significant heterogeneity in the international and global activities of banks across countries. This paper develops and tests a theoretical model that explains this variation from an international trade theory perspective. View Article

FCA: CP13/2 - Mortgage Market Review - Data reporting
The Financial Conduct Authority wants to collect additional data about mortgages to monitor and supervise conduct in the mortgage market, given the changes in regulation coming into effect on 26 April 2014 as a result of its Mortgage Market Review (MMR). View Article

Council adopts new rules on credit rating agencies
The Directive and Regulation amend existing legislation on CRAs in order to: reduce investors' over-reliance on external credit ratings; mitigate the risk of conflicts of interest in credit rating activities; and increase transparency and competition in the sector. View Article

IPE: EU Council approves proposals to reduce reliance on rating agencies
The European Council has approved an amendment to the Directive regulating credit rating agencies, with the view to reducing occupational pension funds' "over-reliance" on external ratings. View Article

FESE response to IOSCO Consultation Report: Regulatory Issues Raised by Changes in Market Structure
Given the increased levels of competition and the subsequent fragmentation in European markets, this IOSCO consultation is a timely contribution to examine how best to assist market authorities in relation to issues raised by market fragmentation. View Article

IRSG Briefing on third country provisions in the EC Proposal for a revised MiFID/MiFIR
To enable international capital flows to continue, both into and out of the EU, significant amendments are needed to the MiFID/R proposals. MiFID/R needs to balance the need for access to international markets with maintaining high standards of investor protection and market integrity within the EU. View Article

IRSG Briefing on trading transparency and market liquidity in the MiFID/MiFIR Proposals
The group agrees that an increase in pre- and/or post-trade transparency in some segments of the non-equity markets could deliver benefits to market participants and the public. However, any newly-introduced transparency regime should be carefully calibrated so that its costs do not outweigh its potential benefits. View Article

Spiegel: Violation of Treaties - Berlin wary of ECB plan to help southern Europe
The German finance minister is deeply critical of an ECB idea to purchase asset-backed securities, fearing that the plan could be little more than "obscured state financing", a no-no for the ECB. Schäuble said that such a plan would violate EU treaties. View Article

Chatham Financial survey highlights impact of regulatory uncertainty on derivatives end-users
According to a recent survey from Chatham Financial, the majority of derivatives end-users facing compliance requirements from Dodd-Frank and EMIR are underprepared to meet key obligations for one or both sets of rules. View Article

UK Chancellor's closing remarks at the G7 meeting
Mr Osborne focused on the commitments of the G7 and the UK in banking, securities and tax evasion. View Article

EIOPA stakeholder groups – selection process 2013
EIOPA launched the Call for Expression of Interest regarding the setting up of EIOPA Stakeholder Groups - the Insurance and Reinsurance Stakeholder Group and the Occupational Pensions Stakeholder Group - following the expiration of their mandates later this year. Deadline for application is 23 June. View Article

Insurance Europe: EU-US Insurance Dialogue - Transatlantic partnership welcomed
Insurance Europe and the American Council of Life Insurers (ACLI) have submitted joint comments to the US Federal Register in which they strongly support the intent to establish a Transatlantic Trade and Investment Partnership (TTIP). View Article

Bank of Ireland/Elderfield: The regulatory agenda facing the insurance industry
Speaking at the European Insurance Forum in Dublin, Elderfield said the benefits of planning for the Solvency II Directive far outweighed the costs. View Article

FCA/Wheatley: Meeting the growth challenge
Speaking at the BIBA conference in London, Wheatley looked at the growth of UK insurance, and at how the general insurance industry has been characterised over the years by its attention to customer service. View Article

BIBA: Insurance industry start claims initiative
The British Insurance Brokers' Association (BIBA), the ABI, the Chartered Institute of Loss Adjusters (CILA), brokers and insurers have started a new claims working group which aims to engage proactively and positively with the FCA Thematic Claims Review. View Article

BIBA announces first proposals from strategic review
BIBA has proposed an overhaul of its governance structure and a new model for segmenting its membership in order to provide them with a more tailored approach better suited to their representation needs. View Article

ABI comments on FCA thematic review of claims handling in general insurance
ABI commented on the announcement by Martin Wheatley, FCA Chief Executive, that the FCA will be conducting a thematic review of claims handling in personal insurance. View Article

Moody's: New regulatory regimes could have credit implications as insurers respond
Future significant changes to global insurance solvency regimes will not directly affect insurers' ratings, but company responses could have positive and negative credit implications, says Moody's in a new report, "Global Insurance Regulators Battle Doubts and Delays Over Solvency Modernisation". View Article

GIAJ comments on the process for developing and maintaining the NAIC list of qualified jurisdictions
GIAJ) submitted to the National Association of Insurance Commissioners (NAIC) its comments on the revised "Process for Developing and Maintaining the NAIC List of Qualified Jurisdictions". View Article

PensionsEurope warns impact study insufficient for pensions overhaul
PensionsEurope issued its position paper on the preliminary results of the Quantitative Impact Study (QIS). PensionsEurope reiterates its concerns about the HBS approach, and states that the QIS cannot serve as a basis for an IORP II Directive Proposal. View Article

Hedgeweek: EU proposal will only cause more confusion
In light of continual struggles from European fund managers to comply with the impending AIFMD, Nicola Smith, CEO of hedge fund administrator Helvetic, says that plans by the Commission to introduce liquidity buffers and leverage caps on financial firms have come at the most inopportune time. View Article

HM Treasury: Transposition of the Alternative Investment Fund Managers Directive
The Alternative Investment Fund Managers Directive is due to be transposed into UK national law by 22 July, 2013. The government published responses to a further consultation paper issued in March. View Article

IMA: HMT rules enable marketing of new alternative investment funds
IMA's Julie Patterson said that the consultation process with the Treasury "underlined the Government's commitment to engage constructively on new legislation, as set out in 'The UK investment management strategy'". View Article

IPE: IMF warns Dutch pension funds against mortgage investments
The IMF has warned that Dutch pension funds should refrain from making additional investments in mortgages, with a view to giving banks more leeway in getting the housing market moving again. View Article

NAPF: UK Government bans consultancy charges and looks at capping DC pension fees
The National Association of Pension Funds reacted to a Government announcement on pension charges. View Article

IPE: DWP promises consultation on DC default charge cap
The UK Department for Work & Pensions (DWP) is to consult on the introduction of a charge cap for default investment options in defined contribution (DC) funds. View Article

IPE: TPR inadvertently imposes higher risks on schemes
The UK regulator's intention to do away with automatic scrutiny of recovery proposals exceeding a decade has been welcomed by Hymans Robertson, which argued that the previous approach could have inadvertently increased deficits. View Article

Mark Cobley: The EU is both saint and sinner on pensions reform
At a time when the UK's membership of the EU has rarely been more controversial, two current EU initiatives aimed at Europe's €3.5 trillion pensions industry make Brussels look like both saint and sinner at once, writes Cobley for FN. View Article

FT: Top hedge funds bet on Greek banks
Some of the world's leading hedge funds are pouring money into the Greek banking sector in expectation of potential returns, even as the country struggles to right its economy in the face of deep government spending cuts. View Article

ECA's role of external auditor of the EU is more important than ever in its 35-year history
Luxembourg Prime Minister Juncker, Minister of State Perry representing the Irish Presidency of the Council, and ECA President Caldeira spoke about the challenges facing the EU and the role of the ECA. View Article

ACCA: Audit quality – It's not (only) about the auditor
ACCA has responded to 'A Framework for Audit Quality', a consultation paper from the IAASB. "We all have a role to play", says ACCA welcoming the proposed framework. View Article

ACCA discussed the future of IFRS
According to the main conclusions of a roundtable organised recently by ACCA, serious concerns linked to the conceptual framework of the IFRS need to be solved, namely the concepts of prudence and stewardship, as well as the issue of quality, complexity and reliability of the standards. View Article

FRC: New project focusing on accounting policy disclosures and integration of related financial information
The FRC's Financial Reporting Lab (the Lab) is calling for listed companies and investors/analysts to participate in a project on approaches to disclosing accounting policy information that are considered to be most effective. View Article

ACCA/Hughes: Integrated reporting as a future
Liz Hughes, head of ACCA Ireland, commented on the value of a new approach to financial reporting. The term "integrated reporting" may not yet be a part of current accountancy vocabulary but the likelihood is that it will become a standard feature of reporting practices in the near future. View Article

IASB and ASBJ confirm future relationship
Representatives of the IASB and the ASBJ met on 9 and 10 May 2013 in Tokyo. During the meeting, the boards discussed projects on the IASB's agenda, including Financial Instruments, Insurance Contracts and the work to revise the IASB's Conceptual Framework for Financial Reporting. View Article

QED speech on EU-US financial regulation by Sharon Bowles MEP
"This is not an EU-US universe, and where we are stuck between ourselves it may often be the solution to look wider instead of just trying to see which of us can win. Observations from third countries might teach us a few things." View Article

EACT position concerning the Proposal for a Council Directive implementing enhanced cooperation in the area of a financial transaction tax
EACT believes the FTT would have a serious unintended consequence: its negative impact on European companies as well as pension funds and individuals, by for example increasing the cost of funding and managing business risks and tightening credit conditions. View Article

BBA letter to Mervyn King on FTT
Banks operating in London view the Financial Transaction Tax (FTT) currently being discussed by some Member States under the enhanced cooperation procedure as having the potential to disrupt significantly capital markets and the transmission of liquidity which support the real economy. View Article

Economic governance: Council adopts "two-pack"
The Council today adopted the so-called "two-pack" of regulations aimed at further improving economic governance in the euro area. View Article

ECOFIN Council conclusions on Macro-Economic Imbalances - In-Depth Reviews 2013
The Council underlined the need for policy action and commitment to structural reform in all 13 Member States to address imbalances in a durable manner to create conditions for sustainable growth and jobs. View Article

ECOFIN Council conclusions on tax evasion and tax fraud
The Council reaffirmed that "all Member States recognise the importance of taking effective steps to fight tax evasion and tax fraud", and recognised the need to tackle aggressive tax planning. View Article

Savings taxation: Council go-ahead to negotiate with Switzerland, Liechtenstein, Monaco, Andorra and San Marino
The Council gave a mandate to the Commission to negotiate amendments to the EU's agreements with the five countries on the taxation of savings income. The decision represents an important step in the EU's efforts to clamp down on tax evasion and tax fraud. View Article

Irish Presidency: Agreement on taxation issues and progress on banking resolution at ECOFIN meeting
ECOFIN has reached an agreement on a mandate for negotiations of amendments to the Savings Tax Agreements with third countries. The Savings Tax Directive will now be discussed at next week's meeting of the European Council. Progress on Banking Resolution and Recovery has also been achieved. View Article

Council agrees additional funds for 2013 budget
The Council today agreed to provide €7.3 billion in a first stage and to focus this amount on measures to support economic growth, create jobs and tackle unemployment, especially among young people. View Article

Graham Bishop's Blog: EU Referendum UK: 114 Tory 'relaxers' shoot Cameron...
... blissfully unaware the 'mainlanders' are already detaching the 'islanders'. View Article

Banking	Securities	Insurance
Asset Management	Corporate Governance/Accounting	Financial Services Policy
European Council/Parliament	International/G20	Graham Bishop’s Articles and Speeches
		About this email

This week in "Brussels"

16 May 2013

© Graham Bishop